Recently, the Kerala High Court clarified the interplay between the Employee’s Compensation Act, 1923, and the Legal Services Authorities Act, 1987, holding that dependents who receive compensation through Lok Adalat proceedings cannot subsequently claim the same relief under the EC Act. The case arose from a tragic workplace death, where the deceased’s parents had initially settled their claim via Lok Adalat but later sought statutory compensation. The Court emphasised the binding effect of alternative dispute resolution under the Legal Services Authorities Act and reinforced the principle that one cannot pursue multiple remedies for the same grievance.
Brief Facts:
The case arose from a claim filed by the parents of a deceased employee who lost his life while working as a hydraulic lift operator in a quarry owned by the employer. The Employee’s Compensation Commissioner found an employer–employee relationship and directed the employer to pay compensation of Rs. 8,61,120/-. However, prior to that, the dependents had approached the Lok Adalat, where the dispute was settled for Rs. 10 lakh. Despite receiving the amount, they later preferred an appeal challenging the Commissioner’s order and sought the compensation determined therein.
Contentions of the Appellants:
The Appellant contended that the objective of Section 8(1) of the Employee’s Compensation Act, 1923, is to safeguard dependents of deceased employees from being compelled to accept inadequate settlements directly from employers. It was argued that this purpose would be defeated if their claim is rejected solely on the ground that compensation had been received under a Lok Adalat award. To strengthen this contention, reliance was placed on Shah v. Rajankutty and Varghese K.M. v. Thankamma @ Ponnamma and Others, which held that employers cannot discharge their liability to pay compensation without depositing the amount before the Commissioner as mandated under the Act.
Contentions of the Respondent:
The Respondent argued that the appellants had already approached the Lok Adalat, where the dispute was amicably settled, and received Rs. 10 lakh, an amount higher than the compensation determined by the Commissioner. It was further contended that having opted for and benefited from the Lok Adalat proceedings, the appellants could not subsequently pursue a fresh claim under the Employees’ Compensation Act. Reliance was placed on multiple cases to emphasize the finality and binding nature of Lok Adalat awards and the principle of election of remedies.
Observation of the Court:
The Court, while examining the interplay between the Employee’s Compensation Act and the Legal Services Authorities Act, observed that “Section 25 of the Legal Services Authorities Act, 1987 provides that the provisions of the said Act shall have overriding effect over anything inconsistent contained in any other law for the time being in force. The provisions of the Legal Services Authorities Act, 1987 have overriding effect on the provisions in the EC Act, which are inconsistent with the same.”
It further clarified that “Section 22C(1) of the Legal Services Authorities Act provides that any party to a dispute may, before the dispute is brought before any court, make an application to the Permanent Lok Adalat for the settlement of the dispute. Under the First Proviso to Section 22C(1), any matter relating to an offence not compoundable under any law alone is excluded from the jurisdiction of the Permanent Lok Adalat. Section 22C of the Legal Services Authorities Act, 1987, does not exclude the proceedings under the EC Act. Section 22C(2) of the Legal Services Authorities Act, 1987, provides that after an application is made under sub-section (1) to the Permanent Lok Adalat, no party to that application shall invoke jurisdiction of any Court in the same subject.”
In light of these provisions, the Court held that “since the applicants invoked the remedy under the Legal Services Authorities Act and obtained compensation for the death of their son, they have no right to approach the Employee’s Compensation Commissioner under the EC Act for obtaining the very same compensation.”
The Court also emphasized that the purpose of Section 8(1) of the EC Act is to protect dependents of deceased employees from “undue influence, duress, defrauding, misrepresentation or exploitation” by employers who may otherwise persuade them to accept lesser compensation. However, it noted that when such disputes are settled through the “mediation/adjudication of the Permanent Lok Adalat, which is also a judicial body, there is no question of any undue influence, duress, defrauding, misrepresentation or exploitation on the part of the employer.”
Accordingly, the Court concluded that “the bar under Section 8(1) of the EC Act will not be applicable to the proceedings under Section 22C of the Legal Services Authorities Act,” and once dependents have received compensation under such proceedings, they cannot subsequently invoke the EC Act, “in view of the doctrine of election.”
The decision of the court:
In light of the foregoing discussion, the court dismissed the Appeal.
Case title: Sivan and Anr. Vs Raju P.V. and Anr.
Case No.: MFA (ECC) NO. 27 OF 2024
Coram: Hon’ble Mr. Justice M.A. Abdul Hakhim
Advocate for the Appellants: Adv A.N. Santhosh
Advocate for the Respondent: Adv. Dinesh Mathew J. Muricken
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Picture Source : https://commons.wikimedia.org/wiki/File:Kerala_New_High_Court.jpg
